Title Examination in Tennessee

A title search is a thorough examination of public records to determine and confirm a property’s legal ownership and to check for claims or liens against the property. This process helps ensure that a seller has the right to transfer ownership and that a buyer will receive clear title to the property.

Title insurance protects property owners and lenders against financial loss due to defects in a title to real estate. It typically covers:

• Errors in public records
• Unknown liens or encumbrances
• Illegal deeds
• Missing heirs
• Forgeries
• Undisclosed easements

Lender’s title insurance protects the lender’s interest in the property up to the amount of the mortgage loan. Owner’s title insurance protects the homeowner’s equity in the property. While lender’s insurance is usually required for a mortgage, owner’s insurance is optional but recommended.

The duration of a title search can vary depending on the complexity of the property’s history and local record-keeping practices. Generally, it takes about 10-14 days, but it can be shorter or longer in some cases.

A title defect, also known as a “cloud on title,” is any irregularity in the chain of title that could impair the owner’s right to the property or make the title unmarketable. Examples include outstanding liens, easements, errors in public records, or competing claims of ownership.

If an issue is found during the title search, the title company will typically work to resolve it. This might involve:

• Paying off outstanding liens
• Correcting errors in public records
• Obtaining releases from easements
• Resolving boundary disputes If the issue can’t be resolved, it may affect the sale of the property or require additional negotiation between buyer and seller.

While not legally required in all cases, title services are typically used in most real estate transactions. Lenders usually require a title search and lender’s title insurance for mortgage loans. Even in cash transactions, buyers are strongly advised to obtain title services for protection.

Payment for title services can vary by location and agreement between parties. In some areas, the seller traditionally pays for the owner’s title insurance policy, while the buyer pays for the lender’s policy. However, this can be negotiated as part of the purchase agreement.

A title company often acts as a neutral third party in the closing process. Their roles typically include:

• Holding earnest money in escrow
• Preparing closing documents
• Calculating pro-rated payments for taxes and other fees
• Facilitating the transfer of funds
• Recording new deeds with appropriate government offices
• Issuing title insurance policies